In a session at Microsoft’s Convergence conference, an attendee asked the question:

“Why isn’t anyone talking about using CRM instead of ERP for creating and sending quotes?  This is an important customer-facing activity in our business and it seems that everyone defaults to doing this in their ERP system.”

It was a great question, and although the speaker didn’t have an immediate answer, a small crowd formed around the person who asked the question at the end.  I’m not sure if it was a brainstorming group or a support group.  But some of the comments that came out:

• I don’t want sales people in the ERP system.
• Our reps have to use too many tools and it slows them down. Can’t we make CRM their one primary application?
• What about order entry?  That’s customer facing too.  Can’t CRM do that?

These are great questions, and something that we see frequently in the marketplace.

Why ERP?

The fact is that most modern CRM systems have quoting and order entry modules, and so do most modern ERP systems.  But there are three reasons why businesses still handle quote and order management in ERP: (1) ERP was there first and they don’t want to pay the price to migrate it to CRM, (2) ERP is the 50 year old paradigm for handling quotes and orders, and paradigm shifts are difficult, (3) the product catalog is already managed in ERP and it is easier to work with that rather than to sync it with CRM. 

There is also a misperception that CRM solutions are not as powerful as ERP systems when it comes to handling quotes and orders.  But this misperception is outdated by a number of years.  The reality is that most organizations will have to make customizations to their quote and order-entry processes regardless of which system it is in, so the investment may as well be directed to the best system to get the job done.

So, the primary reasons for managing quotes and orders in ERP?  It’s easier to set it up there, and that’s the way we’ve always done it.

Why CRM?

So why should companies consider using their customer relationship management system for these functions?  Our clients and recent research indicates four compelling, and highly inter-related, reasons to consider a CRM application for quoting and order entry.

1. Fewer Systems: In a recent survey, individuals were asked to rank the leading causes for CRM failure in their organizations. The #1 answer? Lack of integration. In a related question, individuals were asked how many systems that they had to use to get their jobs done, when the answer was more than 2 systems, their satisfaction with their CRM system fell off significantly.  Forcing people to go to different places to get their job done slows them down, frustrates them, and demoralizes them.  If they can find an easier way, they will.  And if that easier way means not using CRM anymore, that’s what they will do.
   
   
2. More Self-Service: The second reason is related to the first.  When people have to use too many systems to get their jobs done, it often results in some people who simply learn to ask others to do their work for them.  In a recent case study interview, one company reported that their inside reps were competent with up to 7 systems to get their jobs done, but the field sales reps didn’t have time to learn these systems, so they depended on inside sales for answers to even simple questions.  This created a situation where inside sales reps were burdened not only with their own work, but also with supporting the field sales team.  It was demoralizing and frustrating for both teams.
   
   
3. Customer Response Time and Quality: Navigating several (or more) systems to find customer information slows down the process of serving and selling to customers.  Ultimately, this translates into fewer won sales and diminished customer loyalty.  It is critical to have information about customers in the hands of the people who talk to customers every day. Study-after-study has shown that satisfied and engaged employees create loyal customers – in other words, fewer systems will create more engaged employees and more loyal customers.    
   
   
4. Integrate Data or Migrate Apps? It is fairly well accepted at this point that quote and order history should be visible in whatever CRM application an organization is using.  That being the case, CRM is going to need to be configured to present this data anyway.  The only remaining question is: should it also be configured to be the data entry tool, or will users be forced to do this in a different system?

Customer-Centric or Technology-Centric

The question that a team should ask is: “are we a customer-centric organization, or a process/technology centric organization?”  If people come first in your organization, then the decisions you make will be different if process comes first.  In fact, more organizations that are choosing a customer-centric approach are moving other customer-facing processes to their CRM system.   

When to Make the Move?

If you’re going down the path of migrating this process to CRM, the next question is: when do we make the move?  That will certainly vary from one organization to the next.  Here are a few rules to live by:

• If you’re implementing a new CRM system, don’t do this in the first phase (the exception being the next rule)
• If you’re upgrading your ERP system soon, then migrate this function when you make the upgrade so that you don’t pay to do it in the new ERP system, and then pay again to do it in CRM
• If you have an existing CRM and ERP system, you will need to plan the roadmap out carefully to optimize costs and manage the change process with your team – but generally each phase of your CRM project will focus on a team, so aim to do it when you are working with the team(s) that manage these processes

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